Biogen to Cut 11 Percent of Workforce, Several Drug Programs

Biogen Inc. on Wednesday announced it was cutting 11 percent of its global workforce and eliminating the development of several drugs, including one for lupus, in moves that will reduce operating expenses by about $250 million this year.

Wall Street signaled its approval of the belt-tightening, as well as the better-than-expected third-quarter sales of Biogen's multiple sclerosis drugs, sending its shares 9.0 percent higher on Wednesday.

The U.S. biotech stock had lost more than a third of its value since July, when it cut growth forecasts for its top-selling MS drug Tecfidera.

The cost savings will allow Biogen to focus on its most promising opportunities, including late stage development of its high-profile Alzheimer's disease drug aducanumab, two other Alzheimer's programs, and its anti-Lingo drug that aims to repair nerve damage caused by multiple sclerosis.

The company will also pour some of its savings into direct-to-consumer marketing of Tecfidera in an effort to reignite growth in the United States and elsewhere. It cut a Tecfidera program in secondary progressive multiple sclerosis after disappointing trial results.

Chief Executive George Scangos said even with mounting pressures to rein in prices of U.S. prescription drugs, medicines like aducanumab and others it chose to focus on will get good reimbursement from payers if approved.

"In the end, things are going to be priced according to the value they bring to patients," Scangos said.

The company said it may have found a way through dose titration to reduce a type of brain swelling that had been the most concerning side effect seen with aducanumab.

Biogen, which had about 7,550 employees as of Dec. 31, said it expects to incur charges of $85 million-$95 million, primarily in the fourth quarter, relating to the jobs cuts. It also plans to announce other non-labor related cost saving moves by year end.

Biogen Inc. on Wednesday announced it was cutting 11 percent of its global workforce and eliminating the development of several drugs, including one for lupus, in moves that will reduce operating expenses by about $250 million this year.